State Farm said it posted an underwriting loss in its auto insurance business of $2.8 billion in 2010, but improvement in the property and casualty segment overall drove a 200 percent increase in net income for the year.
State Farm reported after-tax net income of $1.8 billion for 2010, compared to $600 million in 2009, the insurer said.
Auto insurance is about 62 percent of net written premium from State Farm's P&C companies. Earned premium in auto increased 1.6 percent from 2009 to $31.4 billion in 2010, State Farm said.
Spokesman Dick Luedke said the overall rate for auto insurance increased 2.8 percent in 2010. State Farm increased auto insurance rates in 32 states and decreased them in 10, he added.
The insurer in 2010 recorded a combined $3.1 billion underwriting loss in its P&C operations, which include auto, homeowners, health and other lines. The mutual company took a $3.7 billion underwriting loss in 2009. Due to gains in investments and other income, net income for the segment was $1.3 billion, after tax, compared to $400 million in 2009.
In the homeowners line, earned premium was $17.3 billion, an increase of 5.9 percent from 2009. Incurred claims and loss adjustment expenses were $13.2 billion. The underwriting loss was $900 million.
State Farm Florida continues to post negative results. The subsidiary's net worth decreased to $327 million from $366 million in 2009. It was $822 million in 2007. Since the Florida-only company's start in 1998, it has recorded underwriting losses of $2.2 billion, including $186 million in 2010, Mr. Luedke said.
State Farm Florida is seeking an average 27.7 percent homeowners rate hike in the Sunshine State.
State Farm said its combined net worth increased $3.1 billion in 2010 to $61.2 billion. The insurer increased its net worth $4.8 billion in 2009 after it decreased $10.4 billion in 2008.
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